Unit buyers warned again as approvals rebound

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Nearly 60% of all dwellings approved in Australia’s capital cities in the year to July were units according to analysis by CoreLogic.

According to CoreLogic’s analysis, 57.9% of all capital city dwelling approvals in the year to July were for units.

In total, 76,356 capital city houses and 104,835 capital city units were approved for construction over the 12-month period. There have now been more units approved for construction than houses across the combined capital cities for 22 consecutive months.

In July alone there were 6,482 houses and 10,898 units approved for construction across the combined capital cities, making it the highest month of approvals since October 2015.

“Despite a recent slowdown in capital city dwelling approvals there was a substantial rebound in July 2016,” CoreLogic research analyst Cameron Kusher said.

Over the year to July, Sydney, Melbourne, Brisbane and Canberra all had more units approved than detached houses.

In Sydney, 38,307 units were approved in the year to July, compared to 16,360 houses. Year-on-year the number of unit approvals increased 9.1%, compared to 3.1% for house approvals.

Over the 12-month period, Melbourne had 31,548 units approved for construction, while 25,880 houses were approved. Unit approvals fell 7.9% in Melbourne over the year, while house approvals increased 11.2%.

In Brisbane, unit approvals grew 7.4% over the year to 19,691, while house approvals fell 1.4% to 11,210.

Canberra’s house approvals fell 8.1% to 1,129 over the year to July, while unit approvals grew 24.7% to 3,792.

Kusher said despite the fact that many projects may not be completed doe to recent lending changes, the figures still show why those considering buying a new unit need to be careful.

“It will be interesting to see just how many of these approvals immediately progress to commencement and ultimately through to a completion given tighter lending conditions imposed on both developers and purchasers for off-the-plan units,” he said.

“The data also reiterates why purchasers of off-the-plan units in major capital city housing markets should be very selective with regard to the types of units they purchase.”